When you hear " Taylor Swift tax ," it may sound like a Taylor-made tribute. But no, this is not a tribute. It's an inside joke intertwined with the serious business of housing policy.
The state of Rhode Island has proposed a new levy on luxurious second homes that are not primary homes. According to Realtor.com, non-owner-occupied properties worth more than $1 million will pay an additional $2.50 for every $500 above the first million. For example, a $2 million waterfront home could result in an additional $5,000 in annual property taxes. The policy begins in July 2026 and includes an inflation adjustment starting in mid-2027. Importantly, if a homeowner rents out their property for more than 183 days, the premium does not apply.
Although the nickname is not officially sanctioned by the government, it is becoming the most commonly used phrase for the tax in the media. Taylor Swift owns a beautiful Watch Hill, Rhode Island mansion worth around $17 million. Under the surcharge, the estate alone might cost her an additional $136,000 per year. The term stuck, part joke, part shorthand, but the law applies to all expensive second residences, not just hers.
The history of Taylor's mansion, High Watch, is fascinating. It was erected between 1929 and 1930 for the Snowden family, who run an oil firm. They appropriately dubbed the summer home Holiday House. It was bought in 1948 by socialite Rebekah Harkness of the Standard Oil family, who enjoyed throwing opulent Gatsby-style parties. Gurdon B. Wattles, a businessman, refurbished the property in 1974 and renamed it High Watch. Swift bought the property for $17,750,000 in 2013, and it inspired her 2020 song "The Last Great American Dynasty."
Senator Meghan Kallman, who supports the measure, told Newsweek that it's about fairness. "By asking these owners to pay their fair share, Rhode Island can generate much-needed revenue and prevent cuts to essential services like health care and education," especially since many of these properties are purchased by out-of-state buyers who don't contribute much to the local economy.
Supporters argue the law could help:
Critics, notably those in the real estate industry, warn that the tax could backfire. They claim it could:
The possibility of a new tax is undoubtedly generating interest online because to its nickname. Dave Portnoy of Barstool Sports chipped in with a wink: while he does not own property in Rhode Island, he joked that he would be delighted if Massachusetts enacted a "Dave Portnoy tax" after him.
If authorized, homeowners will have until mid-2026 to choose between two options.
1. Prove they occupy the home for at least 183 days (to avoid the penalty), or
2.Lease it out to keep the property active.
It's both a carrot and a stick: increase residence or revenue, or risk the luxury tax.
Rhode Island isn't alone in taking action. Montana, for example, plans to shift more of the property tax burden to non-resident second-home owners, particularly Californians, as part of its 2026 property-tax overhaul. Meanwhile, California has pursued its own strategy. Although there is no statewide "Taylor Swift tax," Los Angeles voters approved Measure ULA , which imposes a "mansion tax" on high-end property sales—4% on deals between $5 million and $10 million and 5.5% above that.
Further north, in South Lake Tahoe, California, a ballot measure (Measure N) proposes taxing vacation houses that are vacant for more than six months per year, up to $6,000 per year, with the proceeds going toward affordable housing and community programs. Across the Bay, several cities, including Oakland, Berkeley, and San Francisco, have already enacted vacancy taxes: Oakland charges $3,000-$6,000 per year for homes that have been vacant for more than 50 days; Berkeley similarly taxes long-vacant residences ; and San Francisco's ambitious "Empty Homes Tax" was set on a graduated scale, but it was overturned in court in November 2024.
In summary, states and towns ranging from Rhode Island and Montana to California and its municipalities are experimenting with tax measures aimed at underutilized luxury and second houses. The purpose, of course, is to create revenue, encourage occupancy, and alleviate local housing issues—though legislative approaches differ greatly depending on the political and legal situation.
The "Taylor Swift tax" may have a humorous moniker, but it is based on a real issue. How can communities use absentee wealth to promote local stability? As coastal communities struggle with affordability, authorities are debating whether taxing luxury properties is solid economics or simply a great headline. Whatever the conclusion, both Swifties and non-Swifties will be paying careful attention.